I think this was more of a systemic failure - the file that failed in this case was also relied upon to disable development mode/error output on production servers. I'm pretty sure my production web servers return a HTTP code 500 with no further output when they encounter an error with the php.ini-production configuration file provided in the PHP source distribution.

The hitch was of course that the file in question had a "i?php" (someone was using vi and hit i too many times?) instead of "<?php" which lead the php interpreter to output that section of code as if it were HTML. That feature is something PHP could provide an option to disable and only allow explicit echo/print/printf which should be what templating engines use.